October 17, 2022
Digital Transformation Challenges For Business Operations
Digital transformation isn’t a passing trend. It’s here to stay. More importantly, it’s defining the future. Yet a push toward modernization isn’t as simple as waving a magic wand and saying “Digital-kazam.” Instead, businesses must overcome various digital transformation challenges to ensure success.
Digital transformation uses emerging technologies to modernize your business across operations, customer experience, and company culture. It’s more than platform modernization. As Salesforce shares, digital transformation is about the “reimagining of business in the digital age.”
Since digital transformation is about more than upgrading your tech, most organizations face implementation challenges. According to McKinsey, as many as 70% of digital transformations fail.
However, by understanding the biggest modernization pitfalls organizations face, you can avoid them. To that end, this article explores the most common digital transformation challenges and offers suggestions for overcoming each.
Challenge #1: Lack of Proper Resources or Support
The first challenge of digital transformation to address is that it requires proper support to ensure success. Company leadership must support digital transformation with more than a simple “go-ahead.” By taking a hands-on approach to identify implementation strategies and support the digital transformation team, they can increase the likelihood of success exponentially.
IT talent and bandwidth, or the lack thereof, can present significant digital transformation issues, if not outright failure. Success requires that your IT team have the skillset, the proper tools, and the time to tackle your company’s modernization efforts.
However, until you dive in, it can be difficult to know exactly what you or your IT team needs. Here, an outside consultant can prove invaluable. With experience in the challenges of digital business transformation, expert consultants can ask the right questions to evaluate your priorities and capabilities, including whether you have the necessary resources within your organization.
Challenge #2: Insufficient Change Management Strategy
Organization change and your change management strategy can be one of the most significant digital transformation challenges you’ll face. In the planning phases of your digital transformation, it’s imperative to devote time and resources to creating an actionable change management strategy. You must involve key stakeholders at every level to understand how your initiative affects your entire organization.
In addition to developing an implementation strategy and training plan, you must create implementation teams. It’s a good idea to involve department heads as well as your technology team to ensure that a digital evangelist is available in each area to help people overcome common digital transformation challenges.
Challenge #3: Risk-Averse Culture
The truth is that digital transformation affects processes. And while it leads to a stronger organization that can more effectively adapt to customer needs in a dynamic marketplace, change can be tricky. With that in mind, your change management strategy must include training support so your team can overcome digital skill gaps.
However, it’s not just about training. As in many modernization efforts, one of the biggest challenges of digital transformation is mindset. People are inherently resistant to change, and in addition to learning new tasks and processes, they must also shift their mindset. Instead of following a “this is how we’ve always done it” pattern, they must adopt one that focuses on exploring the possibilities and continually adapting to a changing world.
Challenge #4: Thinking of Digital as One-Off Effort
Digital transformation should not be a single sweeping change. Big-bang modernization almost invariably leads to failure. Instead, your modernization should be an ongoing effort that focuses on finding new ways to streamline and improve the experience for users and customers.
3Pillar Global recommends approaching every modernization effort with a Product Mindset. By prioritizing solving for problems, minimizing time to value, and continually iterating to improve, you’ll equip your team to overcome most digital transformation challenges.
Performing those iterations starts with user experience (UX) research that blends quantitative data and qualitative feedback to help you evolve your strategy by identifying which changes to make and how to prioritize them.
Challenge #5: Neglecting the Customer Experience (CX)
Too often, companies embark on modernization while sacrificing the customer experience. Without customers, you don’t have a company. If you neglect your customers’ needs, they will jump ship. It’s a matter of when, not if.
To that end, an exceptional customer experience is a competitive advantage that helps you create brand loyalty and can improve your reputation. Using customer feedback as a lens to identify customer journey improvements, you can leverage technology to streamline and deliver a more consistent experience.
A word of caution. The entire customer experience doesn’t have to go digital, and it probably shouldn’t. You’ll avoid a significant digital transformation challenge by understanding that your customer experience should blend digital and non-digital interactions.
Avoid the Challenges of Digital Transformation
You don’t want to be part of McKinsey’s 70% failure. And you don’t have to be.
With the pandemic accelerating digital adoption by as much as seven years, information on best practices continues to emerge. While companies associate many challenges with modernization, a simple fact is on your side. Hiring an experienced consultant is the best way to overcome digital transformation challenges.
3Pillar Global invests considerable time in understanding your goals and prioritizing them. By evaluating each against your reasoning, we can help you create the best digital transformation strategy for your unique situation and help you avoid common issues many companies face.
If you’re ready to explore digital transformation for your organization and ensure you’re ready to meet your organization’s future needs and those of your customers, we’d love to help. Contact 3Pillar Global’s team of experts to get started.
Special thanks to these members of FORCE, 3Pillar’s expert network, for their contributions to this article.
FORCE is 3Pillar Global’s Thought Leadership Team comprised of technologists and industry experts offering their knowledge on important trends and topics in digital product development.